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Table of Contents:

current affairs, current events, current gk, insights ias current affairs, upsc ias current affairs

GS Paper 2:

1. Special Drawing Rights (SDR).

2. World heritage day.


GS Paper 3:

1. How the RBI is handling ‘The Great Lockdown’?

2. Ways And Means Advances.


Facts for Prelims:



GS Paper  : 2


Topics Covered: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Special Drawing Rights (SDR)

What to study?

For Prelims: SDR- meaning, objectives, composition and features.

For Mains: Significance of SDRs.

Context: India is not supporting a general allocation of new Special Drawing Rights (SDR) by the International Monetary Fund (IMF) because it feels it might not be effective in easing COVID-19-driven financial pressures.

The new SDR allocation was supposed to provide all 189 members with new foreign exchange reserves with no conditions.

What’s the reason?

Such a major liquidity injection could produce potentially costly side-effects if countries used the funds for “extraneous” purposes.

What is a Special Drawing Right (SDR)?

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.

The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.

So far SDR 204.2 billion (equivalent to about US$281 billion) have been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis.

The role of the SDR:

  1. The SDR was created as a supplementary international reserve asset in the context of the Bretton Woods fixed exchange rate system.
  2. The SDR serves as the unit of account of the IMF and some other international organizations.
  3. The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members.
  4. SDRs can be exchanged for these currencies.


The SDR basket is reviewed every five years, or earlier if warranted, to ensure that the basket reflects the relative importance of currencies in the world’s trading and financial systems.

The reviews cover the key elements of the SDR method of valuation, including criteria and indicators used in selecting SDR basket currencies and the initial currency weights used in determining the amounts (number of units) of each currency in the SDR basket.


Insta Links:

Prelims Link:

  1. What is SDR?
  2. SDR basket includes?
  3. When is it reviewed?
  4. What are IMF quotas?
  5. Can SDR be exchanged for any currency?

Mains Link:

What do you understand by Special Drawing Rights (SDR)? Discuss their significance and key features.

Sources: the Hindu.


Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

World heritage day

What to study?

For Prelims: UNESCO WHS- important sites.

For Mains: Significance and the need for conservation of WHS.

Context: Every year, 18th April is celebrated Worldwide as World Heritage Day to create awareness about Heritage among communities.

The theme of World Heritage Day 2020 is “Shared Culture’, ‘Shared heritage’ and ‘Shared responsibility”.

Key facts:

  • There are a total of 38 heritage sites in India.
  • India ranks sixth in the largest number of heritage sites in the world.


In 1982, the International Council on Monuments and Sites (ICOMOS) announced, 18 April as the “World Heritage Day”, approved by the General Assembly of UNESCO in 1983, with the aim of enhancing awareness of the importance of the cultural heritage of humankind, and redouble efforts to protect and conserve the human heritage.

What is a World Heritage site?

A World Heritage site is classified as a natural or man-made area or a structure that is of international importance, and a space which requires special protection.

These sites are officially recognised by the UN and the United Nations Educational Scientific and Cultural Organisation, also known as UNESCO. UNESCO believes that the sites classified as World Heritage are important for humanity, and they hold cultural and physical significance.

Key facts:

  1. The list is maintained by the international World Heritage Programme administered by the UNESCO World Heritage Committee, composed of 21 UNESCO member states which are elected by the General Assembly.
  2. Each World Heritage Site remains part of the legal territory of the state wherein the site is located and UNESCO considers it in the interest of the international community to preserve each site.
  3. To be selected, a World Heritage Site must be an already classified landmark, unique in some respect as a geographically and historically identifiable place having special cultural or physical significance.

Insta Links:

Prelims Link:

  1. Who declares a site as world heritage site?
  2. What is endangered list?
  3. What is tentative list?
  4. WHS in India and their locations?

Sources: pib.


GS Paper  : 3


Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

How the RBI is handling ‘The Great Lockdown’?

What to study?

For Prelims: Key measures announced and related key terms.

For Mains: Need for and significance of these measures, implications?

Context: The International Monetary Fund has christened the ongoing economic crisis due to Covid-19 as “The Great Lockdown” and reckons it to be the worst recession that the world would have faced since the Great Depression that happened in the first half of the 20th Century.

The total estimated loss to global economic growth is pegged at $9 trillion — more than three times India’s GDP.

How is India tackling the situation? What will be its impact?

Thanks to various measures by RBI and the government, while the rest of the world is certain to contract, India is hoping to be one of the few countries that expand their overall GDP, regardless of how small that increase may be.

RBI has so far made two rounds of policy announcements to counter the debilitating effects of the spread of Covid-19 on the Indian economy.

In the first round, the RBI mainly:

  • Cut the repo rate and the reverse repo rate.
  • Started Targeted Long Term Repo Operations (TLTROs).

In essence, through these measures in the first round, the RBI:

  • Tried to provide regulatory forbearance (that is, greater leniency) in recognising non-performing assets.
  • Tried to boost the liquidity in the financial system so that businesses do not starve of funds.

In the second round, the RBI has:

  1. Cut the reverse repo rate further by 25 basis points (100 basis points make up one full percentage point). The reverse repo rate now stands at 3.75 per cent while the repo rate is 4.40 per cent.
  2. Announced another TLTRO of Rs 50,000 crore but this time it has mandated that 50 per cent of this amount borrowed by the banks must go to small and mid-sized Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).
  3. All India financial institutions (AIFIs) such as the National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI) and the National Housing Bank (NHB), which borrow from the RBI and the market to extend credit to NBFCs and MFIs, will be provided “special refinance facilities for a total amount of Rs 50,000 crore” by the RBI.
  4. More funding to state governments — under the Ways and Means Advances (WMA) facility — as they try to spend to mitigate the economic stress.
  5. In respect of all accounts for which lending institutions decide to grant moratorium or deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall exclude the moratorium period, i.e., there would an asset classification standstill for all such accounts from March 1, 2020 to May 31, 2020
  6. To ensure that loans given to real estate projects, that are getting delayed due to the crisis, do not turn into NPAs, the RBI provided an extension of another year before they are recognised as NPAs.
  7. Allowed Scheduled Commercial Banks to reduce their Liquidity Coverage Ratio from 100 per cent to 80 per cent with immediate effect. The LCR essentially mandates the amount of cash that a bank is required to keep with itself.

Implications of these measures:

  1. Cutting reverse repo more than the repo, and thereby increase the gap between the two rates: On the one hand, the RBI is incentivising banks to borrow from it at low rates and lend it forward to businesses, yet, on the other, it is disincentivising them from coming back and parking these funds with the RBI.
  2. LTRO benefits: It provides more liquidity. More importantly, it also provides it targeted to those institutions that are most hit by the economic slowdown and, as such, most in need of funds to survive themselves and boost economic activity at the bottom of the pyramid (that is, the poorest customers).
  3. With reduced LCR, banks would have more cash to deal with.


Insta Links:

Prelims Link:

  1. What is Liquidity Coverage Ratio?
  2. What does 100 per cent LCR mean?
  3. How are NPAs classified?
  4. Classification of NBFCs?
  5. What are Ways and Means Advances (WMA)?
  6. SIDBI vs NHB?
  7. What is TLTRO?
  8. Trends in differences between repo and reverse repo?

Mains Link:

Amidst the global lockdown, while the rest of the world is certain to contract, India is hoping to be one of the few countries that expand their overall GDP, regardless of how small that increase may be. Discuss.

Sources: Indian Express.


Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Ways And Means Advances

What to study?

For Prelims and Mains: WMA- meaning, features and significance.

Context: The Reserve Bank of India (RBI) has announced a 60% increase in the Ways and Means Advances (WMA) limit of state governments over and above the level as on March 31, with a view to enabling them “to undertake COVID-19 containment and mitigation efforts” and “to better plan their market borrowings”.

Significance of this move:

The increased limit comes at a time when government expenditure is expected to rise as it battles the fallout of a spreading Coronavirus. The availability of these funds will give government some room to undertake short term expenditure over and above its long term market borrowings.

What are Ways and Means Advances?

  • They are temporary loan facilities provided by RBI to the government to enable it to meet temporary mismatches between revenue and expenditure.
  • The government makes an interest payment to the central bank when it borrows money.
  • The rate of interest is the same as the repo rate, while the tenure is three months.
  • The limits for WMA are mutually decided by the RBI and the Government of India.

They aren’t a source of finance per se. Section 17(5) of the RBI Act, 1934 authorises the central bank to lend to the Centre and state governments subject to their being repayable “not later than three months from the date of the making of the advance”.


The WMA scheme for the Central Government was introduced on April 1, 1997, after putting an end to the four-decade old system of adhoc (temporary) Treasury Bills to finance the Central Government deficit.

What if the government needs extra money for extra time?

When the WMA limit is crossed the government takes recourse to overdrafts, which are not allowed beyond 10 consecutive working days.

The interest rate on overdrafts would be 2 percent more than the repo rate.

Types of WMA:

There are two types of Ways and Means Advances — normal and special.

Special WMA or Special Drawing Facility is provided against the collateral of the government securities held by the state. After the state has exhausted the limit of SDF, it gets normal WMA. The interest rate for SDF is one percentage point less than the repo rate.

The number of loans under normal WMA is based on a three-year average of actual revenue and capital expenditure of the state.

 What are the existing WMA limits and overdraft conditions?

For the Centre, the WMA limit during the first half of 2020-21 (April-September) has been fixed at Rs 120,000 crore. This is 60% higher than the Rs 75,000 crore limit for the same period of 2019-20. The limit for the second half of the last fiscal (October-March) was Rs 35,000 crore.

For the states, the aggregate WMA limit was Rs 32,225 crore till March 31, 2020. On April 1, the RBI announced a 30% hike in this limit, which has now been enhanced to 60%, taking it to Rs 51,560 crore. The higher limit will be valid till September 30.

The central bank, on April 7, also extended the period for which a state can be in overdraft from 14 to 21 consecutive working days, and from 36 to 50 working days during a quarter.

 Insta Links:

Prelims Link:

  1. Interest rate and time period for WMA?
  2. Can states borrow under WMA?
  3. What is overdraft?
  4. What are the statutory provisions in this regard?

Mains Link:

What do you understand by ways and means advances? How increase in WMA limits help the governments deal with the present situation? Discuss.

Sources: Indian Express.


Facts for Prelims


Union Agriculture Ministry has launched Kisan Rath Mobile App to facilitate transportation of foodgrains and perishables during lockdown.

  • The app is developed by the National Informatics Centre to facilitate farmers and traders in searching transport vehicles for movement of Agriculture and Horticulture produce.
  • The App will also facilitates traders in transportation of perishable commodities by Refrigerated vehicles.



Insights Current Affairs Analysis (ICAN) by IAS Topper